RICHMOND, Va., Sept. 30, 2015 /PRNewswire/ -- Genworth
Financial, Inc. (NYSE: GNW) (the company or Genworth) announced
today that Genworth Life and Annuity Insurance Company, a
wholly-owned indirect subsidiary of the company, has entered into
an agreement to sell, via reinsurance, certain blocks of term life
insurance to Protective Life Insurance Company. The majority of the
term life insurance blocks included in this transaction are
currently reinsured to River Lake Insurance Company and River Lake
Insurance Company II, which previously had not been consolidated in
the statutory financial statements of the U.S. life insurance
companies. Genworth will continue to administer and service
the policies, which represent approximately $108.7 billion of term life insurance in force
backed by approximately $2.3 billion
of statutory reserves as of June 30,
2015.
The transaction represents another step toward increasing
Genworth's financial flexibility and strength by generating capital
from low return blocks. The company expects to generate initial
capital of approximately $100 to $150
million in aggregate to Genworth. The transaction will
utilize all of the net operating losses in the U.S. life insurance
companies resulting in expected inter-company tax payments over
time to the holding company and other entities for the use of tax
benefits. The impacts will likely be favorable for some legal
entities and unfavorable for others and will vary based upon
utilization of net operating losses and tax sharing arrangements,
among other factors. In addition to the aggregate capital and tax
benefits associated with the sale, the company anticipates a
minimal impact to income and a modest improvement to return on
equity. The company expects to record an after-tax GAAP loss of
approximately $275 to $325 million in
the third quarter of 2015 primarily related to the write-off of
deferred acquisition costs associated with the term life insurance
blocks being sold. The transaction is expected to close during the
first quarter of 2016 and is subject to customary conditions,
including requisite regulatory approvals. Genworth will provide
further details regarding the transaction on its earnings
conference call for the third quarter of 2015.
Goldman, Sachs & Co. acted as financial advisor to Genworth
on this transaction.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500
insurance holding company committed to helping families become more
financially secure, self-reliant and prepared for the future.
Genworth has leadership positions in mortgage insurance and long
term care insurance and product offerings in life insurance and
fixed annuities that assist consumers in solving their home
ownership, insurance and retirement needs. To help families start
"the talk" about their futures and long term care planning,
Genworth recently completed the first stage of its national
#LetsTalk Tour to encourage conversations and information sharing.
Headquartered in Richmond,
Virginia, Genworth traces its roots back to 1871 and became
a public company in 2004. For more information, visit
genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by words such
as "expects," "intends," "anticipates," "plans," "believes,"
"seeks," "estimates," "will," or words of similar meaning and
include, but are not limited to, statements regarding the proposed
transaction and its anticipated financial impact. The proposed
transaction remains subject to certain closing conditions,
including regulatory approvals, and the company cannot predict with
certainty whether or when this transaction will close or what the
actual financial impact will be. Forward-looking statements are
based on management's current expectations and assumptions, which
are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual outcomes and
results may differ materially due to global political, economic,
business, competitive, market, regulatory and other factors and
risks, including the items identified under "Part I—Item 1A—Risk
Factors" of our Annual Report on Form 10-K for the year ended
December 31, 2014, filed with the Securities and Exchange
Commission (SEC) on March 2, 2015 and
as updated in Genworth's quarterly reports on Form 10-Q filed with
the SEC on April 29, 2015 and
August 5, 2015.
We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
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SOURCE Genworth Financial, Inc.